Table 10-2

$$\begin{array} { | c | c | c | c | }
\hline \begin{array} { c }
\text { Quantity } \
\text { (Units) }
\end{array} & \begin{array} { c }
\text { Private Value } \
\text { (Dollars) }
\end{array} & \begin{array} { c }
\text { Private Cost } \
\text { (Dollars) }
\end{array} & \begin{array} { c }
\text { Social Value } \
\text { (Dollars) }
\end{array} \
\hline 1 & 51 & 45 & 57 \
\hline 2 & 48 & 48 & 54 \
\hline 3 & 45 & 51 & 51 \
\hline 4 & 42 & 54 & 48 \
\hline 5 & 39 & 57 & 45 \
\hline 6 & 36 & 60 & 42 \
\hline
\end{array}$$
-Refer to Table 10-2. What is the socially optimal level of output in this market?
A)4 units
B)2 units
C)3 units
D)5 units

Question

Table 10-2
​
​
 $$\begin{array} { | c | c | c | c | } 
\hline \begin{array} { c } 
\text { Quantity } \
\text { (Units) }
\end{array} & \begin{array} { c } 
\text { Private Value } \
\text { (Dollars) }
\end{array} & \begin{array} { c } 
\text { Private Cost } \
\text { (Dollars) }
\end{array} & \begin{array} { c } 
\text { Social Value } \
\text { (Dollars) }
\end{array} \
\hline 1 & 51 & 45 & 57 \
\hline 2 & 48 & 48 & 54 \
\hline 3 & 45 & 51 & 51 \
\hline 4 & 42 & 54 & 48 \
\hline 5 & 39 & 57 & 45 \
\hline 6 & 36 & 60 & 42 \
\hline
\end{array}$$ ​
-Refer to Table 10-2. What is the socially optimal level of output in this market?
A)4 units
B)2 units
C)3 units
D)5 units

Quizplus · Accepted Answer

The socially optimal level of output is where the social value equals the private cost, which occurs at 3 units (Social Value = $51, Private Cost = $51).

Table 10-2 ​ ​ ​ -Refer to Table 10-2

Table 10-2

-Refer to Table 10-2